Control the Aid Arms Race

The harsh economic climate of the last 18 months has forced colleges and universities across this nation to adjust programs and cut personnel in order to sustain some measure of financial stability. Some of the changes have been dramatic, some, perhaps, even permanent improvements, but for the most part they have not been the kind of fundamental, long-lasting, “game changing” alterations that I believe higher education needs.

Let me offer up one idea that not only represents just such change, but would also be possible in today’s tight economic environment. I am not suggesting any of the obvious candidates: increasing class size, raising the student/faculty ratio, increasing course loads for faculty, or reducing — or even eliminating — student life or athletic commitments. No, there is a much bigger fish to be caught.

Merit aid in this country has become unsustainable madness. Whether it be for academic talent, musical ability, geographical diversity, or a host of other attributes, undergraduate merit aid is distributed wildly — even recklessly. At the majority of colleges and universities today, much if not most merit money goes to students who believe they should make their college choice based on financial coaxing, not on the best fit. While some merit aid of course goes to students who have genuine economic need, much of it goes to those who can afford to pay for higher education, and who aren’t necessarily tops in their high school classes either.

Parents share the blame for the fact that these students believe they are entitled to aid. The introduction of merit awards into the college admission experience has created an epidemic of the “Lake Woebegone syndrome” — where all children are above average — and now all young people and their parents expect a scholarship because “exceptional merit” has become the norm, or at least the reality we all pretend to believe. The dollars committed to this “aid warfare” run into the hundreds of millions. It is a huge commitment of resources that does little to enhance an institution’s academic program or culture. It must be reined in.

Diverting resources of such magnitude away from academic programs, support for faculty research and scholarship, and student life opportunities is a bad choice. The need-based aid program must remain a foundation piece in the American academy; yet, at some institutions, commitments to merit aid are putting pressure on low-income students’ access to higher education.

Even colleges that that say they give no merit aid at all usually turn out to do so, just disguising it in some way. For example, the awarding of merit aid to students through named-scholarship programs that can number into triple digits at well-endowed institutions is common. The more recent choice by several name-brand universities to limit cost for families with incomes of up to $200,000 — that’s right, $200K — is effectively a merit-aid program going by a different name.

To be sure, my college does award merit aid, though I am quick to point out that we also award a remarkable amount of need-based aid, as well. (More than 60 percent of our students qualify for need-based assistance, exceedingly high for a highly selective college.) It’s required in this aid arms race.

In many ways I am arguing for the good old days when financial aid was almost entirely based on need. Those students who could afford it, paid the sticker price. An institution’s available aid money went to help those who could not. But the competition among independent colleges and universities has grown increasingly intense, and what started out as a rare incentive for only the very top students has over the last 25 years ballooned into an expectation for all but the most mediocre. As public colleges and universities have joined the merit-aid fight in the last decade, the combat — and the madness — has only intensified. Controlling merit-aid programs will not be without challenge, but it must be done. And it cannot be done alone.

So, my friends, who is willing to join me in a conversation about fundamental change to merit aid that is right and fair and consequential and, I believe, quite possible for higher education and the students we seek to serve? Who is willing?